Lobbying & corruption

Subsidy

KIRK SHELTON, the former vice-chairman of Cendant was sent to jail for ten years and ordered to pay back more than $3 billion lost from the company because of the $500 million fraud he orchestrated. Shelton’s false filings and fraudulent actions inflated Cendant’s sales by more than $500 million. He was accused of masterminding the frauds to drive up the company’s share price and help it to meet Wall Street profit targets. In turn, the falsely inflated stock price kept his pay and bonuses rising, even though the company was in much poorer financial health than the market believed.

Chairman Walter Forbes and Kirk Shelton, the former vice chairman, were indicted in February 2001 for inflating earnings at CUC International Inc. for a decade. Accused of wire, mail, and securities fraud, as well as conspiracy and lying to the SEC.

Mishandling of private data: Cendant's subsidiary records credit card numbers from customers and communicate them to its accountant Ernst & Young. A E&Y employee's computer with 243 000 customers credit card numbers was stolen in February 2006, Cendant started notifyning its customers about the theft at the end of May.: